Portfolio Update

BLACKROCK WORLD MINING TRUST plc  (LEI - LNFFPBEUZJBOSR6PW155)
All information is at 30 April 2019 and unaudited.
Performance at month end with net income reinvested
			One						Three				One		Three			Five
			Month						Months				Year		Years			Years
Net asset value			-3.4%						0.2%				-1.7%		59.6%			8.6%
Share price			-1.5%						3.8%				-0.1%		64.4%			5.2%
EMIX Global Mining Index (Net)			-3.1%						2.6%				5.3%		58.3%			27.0%
(Total return)
Sources: BlackRock, EMIX Global Mining Index, Datastream
At month end
Net asset value including income1:											408.47p
Net asset value capital only:											401.46p
1 Includes net revenue of 7.01p
Share price:											361.50p
Discount to NAV2:											11.5%
Total assets:											£833.1m
Net yield3:											5.0%
Net gearing:											12.6%
Ordinary shares in issue:											176,330,242
Ordinary shares held in treasury:											16,681,600
Ongoing charges4:											0.9%
2 Discount to NAV including income. 3 Based on quarterly interim dividends of 3.00p per share declared on 25 April 2018, 17 August 2018 and 8 November 2018 and a final dividend of 9.00p per share announced on 28 February 2019 in respect of the year ended 31 December 2018. 4 Calculated as a percentage of average net assets and using expenses, excluding finance costs, for the year ended 31 December 2018.
Sector	% Total							Country Analysis								% Total
	Assets															Assets
Diversified	44.8							Global								62.6
Copper	19.4							Latin America								13.0
Gold	16.2							Australasia								9.2
Industrial Minerals	6.7							Canada								5.7
Silver & Diamonds	5.5							Other Africa								2.0
Coal	1.9							USA								1.4
Aluminium	0.8							Kazakhstan								1.1
Materials	0.6							South Africa								1.0
Nickel	0.5							Indonesia								0.5
Zinc	0.5							Russia								0.5
Molybdenum	0.4							China								0.3
Iron Ore	0.1							Argentina								0.1
Current assets	2.6							Current assets								2.6
	-----															-----
	100.0															100.0
	=====															=====
Ten Largest Investments
Company					% Total Assets
BHP						9.7
Vale:     Equity     Debenture						6.2   2.7
Rio Tinto						8.6
Glencore						7.1
First Quantum Minerals						5.6
OZ Minerals Brazil:     Equity       Royalty						2.2 2.4
Newmont Mining						4.0
Teck Resources						3.4
Sociedad Minera Cerro Verde						3.3
Barrick Gold						2.4

Commenting on the markets, Evy Hambro and Olivia Markham, representing the Investment Manager noted:

Performance

The Company’s NAV decreased by 3.4% in April, underperforming its reference index, the EMIX Global Mining Index (net return), which decreased by 3.1%.

The mining sector started April strongly, continuing the positive momentum seen in March, before pulling back to end the month down overall. The pullback appeared to be driven by most mined commodities’ prices retreating modestly from elevated levels, following a strong run. This was despite Chinese economic data being supportive, with evidence emerging that its stimulus measures are having a positive impact. China’s new loans data for March rebounded sharply, for example, whilst property prices also showed signs of improvement. Iron ore bucked the trend of the other mined commodities, however, with the iron ore (62% fe.) price rising 11.6% over the month, to a near 5-year high of $97/tonne. Shutdowns at some of Vale’s iron ore operations in Brazil, cyclone activity impacting iron ore production in Western Australia and China ramping up its steel production have all contributed to the price rise (returns in USD).

In the portfolio, underperformance was driven by stock specifics, with our position in Umicore the largest detractor. The company gives exposure to the electric vehicle and battery recycling theme. The stock had performed well but declined in April after the company profit warned on 2019 and 2020 earnings, citing weaker Chinese electric vehicle cathode demand following subsidy cuts and lower cobalt prices as the main drivers.

This offset strong performance from some of our other positions, such as our position in Ero Copper, which performed well as the company announced a positive exploration update during the month.

Strategy and Outlook

After a strong start to 2019, we remain positive on the outlook for the mining sector. We expect most mined commodity prices to be stable to rising through the remainder of this year. On the demand side, we do not anticipate a hard-landing type event in China and we have been encouraged by stimulus measures beginning to feed through into some improved economic data. On the supply side, supply is tight in most mined commodity markets and, given the cuts in mining sector spending since 2012 (down ~66%), we expect it to remain so.

Meanwhile, 2019 looks to be another year of solid income growth for the mining sector, with special dividends and dividend increases having already been paid. We see the risk-reward opportunity in mining as attractive given the improvements in balance sheets, capital allocation and continued focus on shareholder value. Valuations remain compelling with many of the large diversified miners trading on free cash flow yields of above 10%.

All data points are in GBP terms unless stated otherwise.

23 May 2019